Irish Estates - A Niall McFadden play

Maybe having some bearing on the price as of late -

Goodbody picks three microcaps to buck disappointing value trend

IRISH microcaps, or companies worth less than €100m, are lagging behind medium and larger stocks, a major new report by Goodbody Stockbrokers concludes.

However, the stockbroker identifies recruitment group CPL Resources, technology firm Horizon and outsourcing services provider Newcourt as likely to buck the trend and be 'star performers' over the next 12 months.

Goodbody also selects three longer-terms speculative microcaps which offer potential for a strong upside.

These are: property and facilities management company Irish Estates, Oisin Fanning's Smart Telecom, and diagnostics company Trinity Biotech.

Overall, however, Goodbody concludes that Ireland's 23 microcaps have performed "disappointingly" for investors relative to mid-to-large listed companies.

"Over the last three years our Irish microcaps index has risen by just 3pc, compared with the Irish smaller cap index, which is up 83pc and the overall ISEQ which is up 56pc," the report said.

Return

Despite the poor performance overall, Goodbody said ignoring all microcaps would be a mistake for investors.

Goodbody says that "one-third of the (23) stocks in our universe have delivered triple-digit shareholder return since 2002, and two, Unidare and CPL Resources, have generated a return in excess of 500pc during the same period". The stockbrokers also identify a number of stocks as having potential for corporate restructuring over the next 12 months.

Donegal Creameries, it states, could be a potential takeover target given its substantial property portfolio.

Consolidation in the logistics and storage markets in the UK could see Norish attract corporate activity, or even be a vehicle for an emerging company to come to market